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PeopleSoft Suffers Crisis of Confidence

Its all change at the top of PeopleSoft Inc. (Nasdaq: PSFT). CEO and president Craig Conway’s contract has been terminated by board members concerned about his leadership abilities at an uncertain time for the company. Oracle Corp. (Nasdaq: ORCL) recently extended its $7.7 billion tender offer for the software giant, despite determined resistance from Conway (see Oracle Battles With PeopleSoft).

Speaking on a conference call earlier today, a PeopleSoft exec said there had been "no smoking gun" in the decision to relieve Conway of his duties. “There’s no accounting irregularities; it’s a matter of the board losing confidence in Craig.”

PeopleSoft co-president Kevin Parker downplayed any suggestion of board-room tensions concerning the Oracle bid. “There has been no position that the transaction committee has taken with regard to Oracle that was at odds with Craig,” he said. “We’re not going to go into details of why confidence was lost.”

However, today’s announcement is clearly aimed at reassuring shareholders about PeopleSoft’s viability at a time when Oracle appears to be closing in on its target. Last month a U.S. District Court Judge removed one of the major obstacles in the takeover’s path and reports suggest that the E.U. is likely to give the deal a green light (see Oracle Prevails in Antitrust Lawsuit).

Today PeopleSoft also announced that its third-quarter license revenues are expected to exceed $150 million and appointed Dave Duffield, the company’s founder and chairman, as the new CEO. Kevin Parker, the company’s CFO, was appointed co-president, and will assume responsibility for the company’s internal operations, in addition to his financial role.

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